Home prices grew from the previous rolling quarter and year-over-year in May, making it the first time in two years that both indicators have risen in the same period, asset valuation firm Clear Capital said.
The firm published its home data index market report, showing that the West, South and Northeast saw both quarterly and yearly price gains.
Truckee, Calif.-based Clear Capital uses rolling quarters to study home prices. It compares the most recent four months to the previous three months to give users a more timely look at market prices.
The only area with price declines in the recent report was the Midwest, but that area's declines were less severe when compared to April's report.
Clear Capital noted that "REO-only price performance" can explain why certain markets are doing better than others.
"National real estate prices in May have finally moved past the continued losses of the last few years. The subsequent stabilization pattern seen in recent months has progressed into the start of moderate growth," said Alex Villacorta, director of research and analytics at Clear Capital.
"Strength in REO-only price trends as well as some early indications of price gains spreading from low-tier sectors to the mid, and higher-priced homes is helping confirm that the country continues to make progress on its recovery, and we are expecting to see improvements extend over the next several months."
Home price appreciation grew 0.4% at the national level in May, the first quarterly gain since November of 2011. The West saw the biggest jump in prices over the quarter with the region's growth rate hitting 2.7%, up 2.2 percentage points over the previous month's report.
"Fueling the growth in the West appears to be a shift in demand," Clear Capital said. "Over the past year, the real strength in the West was seen in the lower-priced home segment (those selling for $140,000 and less), likely indicating increasing investor demand for the lower priced units," Villacorta said.
"While this trend isn’t unique to the West, recent growth in the mid- and top-tier sectors of the market is. Over the last rolling quarter, mid- and top-tier segments not only saw growth (top tier is a price point of more than $347,000), but started catching up to the gains in the lower tier. This new dynamic is encouraging, as it shows a broadening demand and a stronger base for growth."
Home price appreciation in the South grew 1.2% quarter-over-quarter, and in the Northeast gains of 0.4% were reported. Midwest prices, meanwhile, declined 2.2% quarter-over-quarter.